This article examines the role of States in mental health policy in Brazil from 1990 to 2009. The methods included the use of an electronic questionnaire on State coordination of mental health in 24 Brazilian States, document review, and analysis based on official data. The results showed that the States use various strategies and tools to conduct mental health policy, especially in monitoring and services delivery. However, the study showed that States have not developed systematic approaches to planning, coordination with other levels of government, or coordination of care. Funding poses a major challenge for management of mental health at the State level. The study suggests that overcoming the challenges in mental health policy depends on the relationship between the Federal government, States, and Municipalities in drafting policies to address each region's specific needs, the promotion of participatory planning, and investment in the sector.